Local equities continue firm trade; Sensex above 39,800 mark

Local equity benchmarks continued firm trade in the morning session on account of buying in front line counters. IT, FMCG and Power have elevated with gains on their respective front line stocks. Traders remained energized with a private report stating that despite the relentless increase in its salary bill, the Centre may go on a hiring spree to fill over five lakh vacancies in various central organisations over the next two years. Investors were encouraged with a report that the CPI is in the process of preparing a memorandum on the GST requirements for the Micro, Small and Medium Enterprises (MSME) sector, which is feeling the pinch of higher tax rates. MSME sector was seriously affected due to the higher GST rates in India, particularly Tamil Nadu, where more than 50,000 industries were closed in the last two years. Traders also took support from RBI Governor Shaktikanta Das’ statement that revised guidelines to deal with stressed assets will sustain improvement in credit culture as it provides for additional provisioning, a strong disincentive for delay in starting resolution proceedings. However, traders ignored India Meteorological Department’s (IMD) data which showed that a delay in the arrival of monsoon has pushed the country’s rainfall deficiency in the first nine days of June to 45%. Monsoon made an onset over Kerala on June 8, a week after its normal arrival date. This has also delayed its arrival in different parts of the country.

On the global front, Asian markets were trading in green; after Donald Trump dropped threatened tariffs against Mexico, while weak US jobs data fanned expectations the Federal Reserve will cut interest rates next month. Back home, on the sectoral front, Aviation industry stocks were trading lower, as International Air Transport Association (IATA) chief Alexandre de Juniac stated that Indian aviation market is facing very tough competition and the cost environment too is not in their favour amid Jet Airways, the 25-year-old airline, shuttering operations.

The BSE Sensex is currently trading at 39888.82, up by 272.92 points or 0.69% after trading in a range of 39785.14 and 39979.48. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.34%, while Small cap index was up by 0.01%.

The top gaining sectoral indices on the BSE were IT up by 1.43%, TECK up by 1.36%, FMCG up by 1.24%, Power up by 1.20% and Capital Goods was up by 0.98%, while Oil & Gas down by 0.78%, and PSU was down by 0.04% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.90%, Power Grid up by 1.78%, Infosys up by 1.66%, Hindustan Unilever up by 1.64% and HCL Tech was up by 1.50%. On the flip side, Kotak Mahindra Bank down by 0.97%, Yes Bank down by 0.75%, Tata Motors - DVR down by 0.43%, Tata Motors down by 0.35% and HDFC was down by 0.32% were the top losers.

Meanwhile, in order to spur job creation and promote trade in a sustainable manner, Commerce and Industry Minister Piyush Goyal has said there is a need to support micro, small and medium enterprises (MSMEs) in developing countries. The minister emphasized that supporting greater participation of MSMEs in developing countries are crucial for jobs and income generation.

He further stated that free trade and investments will benefit developing countries when they remain development centric. He highlighted deviation from this fundamental objective is the main reason for increasing disparities within and across nations. Even currently a large number of nations are still struggling to effectively integrate in the global trading system, which raises doubts about their efficacy.

He added critical linkage between financial and human capital also needs to be recognised to promote trade and investments in a sustainable and inclusive manner. Besides, MSMEs contribute around 45 percent in India's exports, about 25 percent to the Gross Domestic Product (GDP) from service activities and over 33 percent to the manufacturing output of India.

The CNX Nifty is currently trading at 11948.80, up by 78.15 points or 0.66% after trading in a range of 11926.85 and 11975.05. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 2.88%, Britannia Industries up by 2.44%, Tata Steel up by 2.08%, Tech Mahindra up by 2.08% and Infosys was up by 1.73%. On the flip side, BPCL down by 3.26%, Indian Oil Corporation down by 2.11%, UPL down by 1.10%, Kotak Mahindra Bank down by 0.91% and Yes Bank was down by 0.89% were the top losers.

All Asian markets were trading in green; Hang Seng increased 581.13 points or 2.16% to 27,546.41, Nikkei 225 surged 262.76 points or 1.26% to 21,147.47, Taiwan Weighted strengthened 130.24 points or 1.25% to 10,539.44, Jakarta Composite soared 84.68 points or 1.36% to 6,293.80, Shanghai Composite gained 27.21 points or 0.96% to 2,855.01, Straits Times advanced 26.91 points or 0.85% to 3,193.20 and KOSPI rose 26.79 points or 1.29% to 2,099.12.